Chlo is planning to purchase a Treasury bond paying a (j2) coupon rate of 6.46% p.a. The

Chloë is planning to purchase a Treasury bond paying a (j2) coupon rate of 6.46% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Chloë purchased this bond on 3 March 2020, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 12.01% p.a., compounded half-yearly. Chloë needs to pay 15% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half year. 

a. $59.2730 

b. $66.8638 

c. $57.4387 

d. $56.4224

Answer rating: 100% (QA)

The detailed answer for the above question is provided below To calculate the purchase price of the bond we need to use the following formula Purchase ... View the full answer